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The Government will limit the amount companies can be charged for their energy bills

   News / 21 Sep 2022

Published: 21 September 2022
Location: London, UK

By Suzanne Evans, Director, Political Insight


Business Secretary Jacob Rees-Mogg has announced that the Government will limit the amount companies can be charged for their energy bills through a new Energy Bill Relief Scheme. The taxpayer will cover half of businesses' electricity costs and a quarter of gas costs for six months from October in a bailout intended to stave off a wave of winter bankruptcies following surging wholesale prices. Martin Young, an analyst at Investec, estimated that the bill to help businesses could hit £25bn or more, with other experts predicting a price as high as £40bn. The total bill for businesses and household support could reach more than £114bn – significantly more than the Covid furlough scheme, which cost £70bn, the Telegraph says. Speaking in New York yesterday, Prime Minister Liz Truss insisted these costs would be “mitigated, first of all by the overall benefits to the economy, but also the fact that we are now investing in the long term supply.”
 
Chancellor Kwasi Kwarteng has been told by the Treasury Committee to publish an Office for Budget Responsibility (OBR) forecast alongside Friday’s emergency budget, if it involves major changes to taxation. Kwarteng is expected to announce further energy support and winter tax cuts, as well as a possible reversal of the 1.25% National Insurance increase.
 
The number of US dollar millionaires in Britain surged ahead of those in France and Germany last year as a property boom and rebounding stock markets sent wealth levels surging, the Telegraph reports.  The UK is now home to 2.85m people with a net wealth of more than 1m (£880,000).
 
As many as 11 trade unions have begun legal proceedings against the government to protect the right to strike, Yahoo Finance UK reports. The judicial review of “anti-worker” regulations has been coordinated by the Trade Unions Congress (TUC), who are attempting to stop new regulations which allowing agency workers to fill in for striking workers. The unions are arguing this is unlawful because the previous Secretary of State for Business failed to consult them, as required by the Employment Agencies Act 1973. The regulations also violate fundamental trade union rights protected by Article 11 of the European Convention on Human Rights, the TUC claims. It has also reported the UK government to the UN workers’ rights watchdog, the International Labour Organisation (ILO), claiming the government’s actions are in breach of international law.
 
According to the latest Lloyds Bank UK Sector Tracker, the number of UK sectors reporting falls in demand increased for a fourth successive month in August. Of the 14 sectors monitored, 11 saw demand, as represented by new orders, fall, one more than in July and the highest number since June 2020. Tourism and recreation, which includes pubs, hotels, restaurants, and leisure facilities, saw the fastest fall in demand to 38.0 from 42.3 in July, as consumers continued to rein in discretionary spending. Technology equipment manufacturers, providers of software services, and metals and mining firms were the only sectors to see both demand and output grow. Scott Barton, Managing Director, Lloyds Bank Corporate and Institutional Banking, said: "The cost of doing business remains extremely high, and firms continue to face into a significant period of uncertainty.
 
The Office for National Statistics (ONS) has published its latest debt and borrowing figures. Public sector net borrowing excluding public sector banks was £11.8 billion in August 2022. This was £2.6 billion less than in August 2021 but £6.5 billion more than in pre-Covid August 2019, when it was £5.3 billion. Public sector net debt excluding public sector banks was £2,427.5 billion at the end of August 2022, or around 96.6% of GDP. This is an increase of £195.2 billion or 1.9 percentage points of GDP compared with August 2021.
 
The ONS also says that the number of UK residents' visits abroad increased to 73% of pre-covid numbers between May 2021 and May 2022, with the most common reason for UK residents travelling overseas was going on holiday (64% or 3.9 million visits).  Visiting friends or family was the next most common reason (1.5 million visits).
 
Meanwhile, London-listed travel company TUI has revealed that its customers paid 18% more for their summer holidays compared to 2019, and that winter bookings have risen, coming in at 78% of pre-COVID levels. Tui stuck to its forecast of returning to profit this year despite losses in the third quarter.
 
Is the pandemic lockdown DIY boom over? The answer is yes, if profits at B&Q and Screwfix owner Kingfisher are anything to go by: they dropped 30% to £474m in the six months to 31 July, down from £677m in the same period a year earlier. Richard Hunter, head of markets at interactive investor, noted that Kingfisher’s share price has fallen by 33% over the last year, as compared to a gain of 4.8% for the wider FTSE100.
 
Shares in magazine publisher Future tumbled as much as 15% yesterday amid reports from Sky News that its veteran boss is set to step down. Zillah Byng-Thorne, who has been at the helm of the company since April 2014, has said she plans to retire in the next 18 months. The group publishes a swathe of titles such as Country Life, FourFourTwo, Marie Claire, Horse & Hound, and Metal Hammer, and also owns the TechRadar website, and comparison site GoCompare.
 
France's Schneider Electric says it said on Wednesday that it has agreed to buy FTSE 100 software firm Aveva in a £9.5bn deal. Under the terms of the acquisition, Schneider will pay 3,100p per share for the roughly 40% of Aveva it does not already own. This is a premium of around 41% to the closing share price on 23 August, which was the last business day before the start of the offer period.
 
FTSE 100 student accommodation provider Unite Group has sold a portfolio of six properties with 1,050 beds in Aberdeen for £33m to Clearbell Property Partners III, a fund managed by Clearbell Capital.
 
JD Sports has agreed a truce with former CEO Peter Cowgill, including a non-compete and consultancy deal that will see him receive £5.5m in addition to his salary package. Cowgill was unceremoniously dumped from the company he helped build into a multi-national leisure and sportswear chain after shareholders raised concerns about his bonuses and reluctance to split the roles of chairman and chief executive.
 
Investor demand for Volkswagen's partial flotation of Porsche has surged after the price range was announced over the weekend. 12.5% of the luxury car marque is to be floated on the Frankfurt Stock Exchange with shares would be priced at between €76.50 and €82.50, raising between €8.7bn and €9.4bn for the parent company and giving Porsche a value of between €70bn and €75bn. An unnamed bookrunner involved in the deal told Reuters demand for the listing now exceeded the full deal size, with the books covered multiple times.
 
Beyond Meat has suspended its COO Doug Ramsey after he was arrested this past weekend for allegedly biting a man’s nose inside an Arkansas parking garage following a University of Arkansas football game, according to a preliminary police report obtained by local television station KNWA/Fox 24. Ramsey, who had just joined the company in December, was charged with terroristic threatening and third-degree battery, according to court records.


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